The findings of a far-reaching federal probe of the Deepwater Horizon disaster may turn out to be a minor victory for BP as it girds for upcoming legal battles.
The final investigation report from the U.S. Coast Guard and the Interior Department, released Wednesday, essentially concurs with what BP has argued from the beginning: that the incident had multiple causes and involved multiple parties.
“It’s favorable to BP in that it doesn’t find BP solely at fault,” said Joseph Soliz, a Houston oil and gas attorney and law instructor following the case.
Yet the report still slams the British oil giant on many fronts – from putting workers at risk by operating outside accepted industry standards to cutting corners at the Macondo well to save time and money.
Elsewhere, it goes after Halliburton Co. for a faulty well cement job and Transocean crew members for being poorly trained to handle well problems, lapses that it said contributed to the deadly accident.
But experts are divided about how much the report will figure into other investigations, including a criminal probe by the Justice Department and hundreds of civil cases stemming from the accident.
David Uhlmann, a former head of the Justice Department’s environmental-crimes section who now teaches law at the University of Michigan, said the report, though largely consistent with other studies, will likely carry more weight with prosecutors because it was conducted by federal investigators.
“I would be very surprised if the Justice Department was not given the opportunity to review this report before it was released, since it now becomes the official position of the U.S. government on the causes of the Gulf oil spill,” he said.
Prosecutors still may tap outside experts for additional information for criminal and civil cases. “But on the points that the report addresses, Justice will be hard pressed to stray too far from the conclusions reached in today’s report,” said Uhlmann, who believes the report boosts chances that BP, Transocean, and Halliburton will face criminal charges.
But Pavel Molchanov, an analyst at Raymond James & Associates, said the report does little to clarify how blame should be apportioned in the April 2010 Macondo well blowout, which killed 11 workers and launched the nation’s worst oil spill.
“It’s purely an independent panel’s assessment,” he said. “But at this point, there are multiple independent panels that are arriving at essentially the same conclusion, and ultimately it’s going to be for a jury to decide what any given company’s financial liability is.”
U.S. Attorney General Eric Holder said in June 2010 that the Justice Department was pursuing civil and criminal investigations into the spill, without specifying possible targets.
A spokeswoman for the Justice Department said Wednesday the office does not comment on ongoing investigations.
Kent Moors, scholar in residence at the Institute for Energy and the Environment at Duquesne University in Pittsburgh, believes the latest investigation report is unlikely to move the needle much in a case that has produced and is still producing massive amounts of evidence.
The case isn’t close to bumping up against statutes of limitations that would require the government to act, Moors said, so prosecutors may want to see what surfaces in civil cases before moving ahead.
U.S. District Judge Carl Barbier said recently that the first of three phases of a trial combining thousands of civil lawsuits against BP and its partners will begin in February in New Orleans.
But analysts with FBR Capital Markets predicted Wednesday that “all outstanding negotiations” on spill liability will settle before that date.
“We believe that involved parties have a strong incentive to proceed as expediently as possible to avoid the headline risks associated with a public court battle,” the analysts said in a report.